Estimates, 1994 (Resumed).

Thursday, 30 June 1994

Debate resumed on the following Estimates which were moved by the Taoiseach on Thursday, 30 June 1994: Votes 1 to 25, inclusive; 30 to 45, inclusive; and Supplementary Estimate to Vote 30.

Minister for Finance (Mr. B. Ahern):Earlier I said that against a background of significant economic progress, coupled with the continuing challenge of unemployment, I wished to look at three issues: first to set our key national economic objectives; second, to summarise the progress made in achieving these [1763] goals in recent years, and, third, to discuss the prospects for the future.

These aims are closely related because much of the gap between Irish and EU average living standards in attributable to our higher unemployment rate. Other policy goals, such as low inflation, improved competitiveness, moderate Government borrowing, reducing the national debt/GNP ratio and so on should all be seen as means to achieving these key objectives rather than ends in themselves.

How have our policies to date been delivering on our key objectives of creating jobs and improving living standards? For a small open economy like ours, there is only one test. If a country as open as ours to international competition, as dependent as ours on international trade, fails to match the pace of progress in our main trading partners, then its policies have not been successful. On the other hand, if it out-performs its competitors, there is clear evidence of a correct policy stance.

With this as our yardstick, what results have been achieved in recent years? Taking the years 1987 to 1993, a period of economic and social consensus and consistent budgetary and monetary policy as our reference period, the results are impressive.

Irish economic growth in terms of GNP has been on average 2 per cent per year better than the EU average. If I were to take output or GDP growth, the comparison would be even better still. Relative living standards here, as measured by GDP per head, have improved from 62 per cent of the EU average in 1986 to 77 per cent in 1993. Employment growth in Ireland has been on average 0.5 per cent faster than the EU average. If I were to take growth in non-agricultural jobs, the comparison would be even better. These results suggest that policy has been on the right lines and that we are moving in the right direction. Given our employment needs, the challenge is to accelerate the pace of progress.

This brings me to my third theme. [1764] What about the period ahead? What do 1994 and 1995 hold in terms of jobs and living standards? How are things likely to develop over the medium-term? This year and next will see further substantial progress in growth, employment and living standards. The international environment is improving. Domestic and international economic analysts are revising upwards their economic forecasts.

The OECD and the IMF now expect growth in the industrialised countries to be about twice as fast as last year and to accelerate further next year. The European Union is returning to growth following a small decline in output last year. The Commission's latest forecasts are for GDP growth of 1.5 per cent this year rising to 2.5 per cent next year. The OECD is predicting a rate of expansion in the OECD area of 2.5 per cent this year, accelerating to 3 per cent in 1995. International inflationary pressures remain quite moderate. This relatively favourable international background presents major opportunities for our exporters, although further gains in market share will not come automatically but must be earned through better competitiveness.

Here at home, against a background of low inflation, the moderate pay increases under the new national agreement and the personal tax reductions in this year's budget have combined to provide the basis for an increase of 3 to 3.5 per cent in real disposable incomes. Allowing for some fall in savings, I expect that growth in consumer spending will pick up to about 4 per cent. Trends so far this year in retail sales and new car registrations support this view. The low interest rate environment and the substantial increase in public capital spending should result in a considerable improvement in investment this year. The climate for investment here has rarely been better.

As is customary at this time of year, my Department will review the growth and budgetary outlook in the light of the Exchequer returns for the first half of the year which are due to be published on Monday next. The results of this review [1765] will be published in Economic Review and Outlook around the end of July.

My budget day prediction of 4 per cent growth is now supported by almost all public and private sector analysts. The EU Commission recently predicted growth of 4.2 per cent for Ireland. Others speak of even stronger growth, all are agreed that this year will see a faster rate of employment growth here than among developed countries generally. Provided that the recovery in the international economy is maintained, next year will see further strong output and employment gains at home.

Ireland's economic prospects for the next three years are described in the Convergence Programme for Ireland 1994-96, which we have just published. As with the previous programme, this new convergence programme is founded on the agreement between the Government and the social partners which maintains the consensus approach of recent years — the Programme for Competitiveness and Work. The new convergence programme coincides with the first years of a major investment effort under the Community Support Framework, CSF, which I will be examining later.

The programme outlines our growth and employment prospects for the period to 1996 and sets out our anticipated performance in relation to the nominal convergence criteria in the Treaty on European Union. These criteria mainly concern the public finances in the form of the general Government deficit and the debt-GDP ratio. A further requirement is that inflation must be close to the best performers in the European Union. Ireland has satisfied these criteria over the last several years and is expected to continue to do so. The convergence programme has been transmitted to Brussels where, in keeping with the new Treaty arrangements for the mutual surveillance of the economies of the Union which apply to all member states, it will soon be discussed at a meeting of Finance Ministers. I will come back later to look at budgetary policy.

The outlook for the medium-term presented in the convergence programme [1766] is very good. An annual economic growth rate of 4 per cent is in prospect, with non-agricultural employment expected to rise by about 60,000 in the three years to 1996. Inflation is likely to remain low, averaging 2.5 per cent. This promising economic performance is predicated on a general Government deficit below 3 per cent of GDP each year. This will enable us to reduce the debt-GDP ratio at an annual average rate of 3 to 4 percentage points — in line with the objectives contained in the Programme for Competitiveness and Work.

This convergence programme is the third major medium-term economic policy document published this year. It builds on the central elements of the two preceeding documents, namely the Programme for Competitiveness and Work and the Community Support Framework and it flows logically from them. The three documents should be seen together as linked policy statements, with the second and third document each restricting on the successful implementation of its predecessor.

First we had the Programme for Competitiveness and Work under which we agreed to maintain the consensus approach to policy formulation which has served this country well. Associated with this programme were pay arrangements which, if followed in a commonsense way, will provide the necessary backdrop of competitive strength and industrial peace. Both of these elements are vital. Next, we had the CSF which spelled out the largest investment plan ever attempted in this country. Now we have the convergence programme which sets out the results which we can expect over the next three years from the successful implementation of the Programme for Competitiveness and Work and the CSF.

The central goal of all three strategic statements — the Programme for Competitiveness and Work, the CSF and the new convergence programme — is essentially the same: to improve conditions for the creation of sustainable employment. The policies which will deliver this objective are also similar — the continuation of the improvement in the public finances [1767] and a deepening of the competitiveness of the economy grounded on a moderate and reasonable pay settlement for both the public and private sectors.

Price stability will continue to be the objective of exchange rate and interest rate policy. While the widening of the ERM bands in August last year changed the foreign exchange environment, the Irish pound has maintained a stable relationship with other low-inflation currencies. These macro-economic policies, reiterated in the convergence programme, are enhanced by micro-economic policies to make markets more efficient. It is appropriate that the process of structural reform should be given prominence in the new programme as it is central to maintaining sustainable growth in output and employment over the medium-term.

Ireland's employment record has been good in recent years, better than all of our partners in the European Union. Despite the gains in non-agricultural employment and even with the fall over the last year in the number on the live register, unemployment is still unacceptably high. In addition, the natural increase in the labour force will remain strong over the next few years.

The programme acknowledges that unemployment is our greatest economic problem. It explains that the structure of the economy determines how effective we can be in turning growth in output and incomes into sustainable jobs and that structural reform must be part of the response to the unemployment problem. The programme goes on to indicate the Government's intentions in that area.

The improved international outlook and the prospective increase in domestic demand suggests that employment growth could accelerate over the next three years. Total employment may expand by 17,000 per annum, or about 1.5 per cent, in the three years to 1996. Within this total, non-agricultural employment is projected to grow by 20,000 per annum, or 2 per cent.

This is by no means a guaranteed outcome. Its achievement is conditional on [1768] the maintainance of our competitive strength. Although such an outcome would be better than that expected for most industrial countries, it would still be inadequate to match the projected natural increase in the labour force of 25,000 per annum.

Emigration is not an acceptable solution to the problem of unemployment, nor is it consistent with the aims of the Maastricht Treaty in relation to convergence. The growth and employment figures set out in the convergence programme can and must be bettered through a renewed commitment from all sections of the community to give top priority to the maintainance of jobs, especially when these are under threat, and to the creation of new jobs. This is my central policy goal; it is the key aim of this Government.

As the Dáil is aware, agreement has now been reached on the other major policy document I referred to, namely, the Community Support Framework. It was approved in principle by the Commission on 15 June and, once certain consultative procedures have been completed, will be formally approved during July.

The Government's development strategy as set out in the National Development Plan is incorporated in the Community Support Framework. All the key elements of the plan are maintained. The allocations between Departments of total combined Exchequer and EU expenditure arising from the Community Support Framework are consistent with the allocations as adjusted by the Government on a pro rata basis last February.

The total amount of EU aid allocated at this stage under the Community Support Framework is, as has been known since last October, less than the amount on which the National Development Plan was based. Account was taken of this shortfall in respect of 1994 in framing the 1994 Estimates. The pro rata adjustments addressed this issue for the balance of the period.

While reductions of £130 million were made to plan expenditures in the 1994 [1769] Estimates, this was not the full amount of the projected aid shortfall. It proved possible for the Exchequer to meet some £40 million of the cost which would have been covered by EU funding on the basis of the plan. Throughout the period to 1999, the Government will look each year at the budget possibilities to see whether additional Exchequer resources can be made available. The Government would regard it as imprudent to commit itself at this stage to further increases in public expenditure. The determining factor will be the budget and economic position each year.

Work is very well advanced on the operational programmes which form the legal basis for the commitment of EU aid. We expect some of these to be approved in July and the rest in the early autumn. The EU aid will then start to flow.

Implementation has not been held up while all of these arrangements are being put in place. The greater part of the plan expenditures are funded by the Exchequer. In those cases, the arrangement is that the gross expenditure totals are provided in departmental Estimates at the start of the year, with the EU aid element being recouped later in the year. Thus implementation has been going ahead since the start of the year.

We should now look forward to continued efficient and effective implementation throughout the period to 1999 with all the necessary steps being taken to ensure that the country derives the maximum advantage from this unprecedented injection of funding into constructive investment.

I now want to look at budgetary policy and the public finances in more detail. The general improvement in Ireland's economic performance has been reflected in the public finances. Ireland's performance in relation to the agreed EU convergence criteria has to date been among the very best in the Union. Ireland's general Government deficit has been below 3 per cent of GDP each year since 1989, thus meeting the minimum required under the Maastricht Treaty. The debt ratio, apart from the once-off [1770] effects of the 1993 devaluation on the Irish-pound value of the foreign currency denominated element of the national debt, has been declining steadily. Our inflation performance has also been excellent.

A central objective of the 1994 budget, of which the Estimates are an essential part, was to maintain the soundly-based public finances which is a necessary condition for the creation of sustainable employment. The prudent budgetary policy we have pursued since 1987 has been the correct approach.

The reduction of our dependence on borrowing, the control of public spending, the easing of the tax burden and its more equitable distribution, have restored confidence and strength to the economy and enabled us to weather the currency crisis, to introduce a new climate of low inflation, and to unwind the differentials which had emerged between the Irish and other European interest rates. The basis for the medium-term developments I have been discussing has been laid by this policy. It is no coincidence, either, that we maintained very reasonable levels of economic growth throughout the recent downturn in the international economy.

The key budget statistic this year is the restriction of the Exchequer borrowing requirement to 2.7 per cent of GNP. While the half-year Exchequer returns are not yet to hand, the indications suggest that the outturn should be close to that target.

Certainly, Ireland's level of borrowing is now down to a level which could not have been envisaged as being within our grasp during the period of large Exchequer deficits which emerged in the period up to the mid-1980s. This reduction in the level of the annual budget deficits combined with a professional approach to treasury management, has meant that the burden of debt and debt-service costs has also declined as a proportion of GNP. The debt-ratio will fall again this year, and we are determined to ensure that, in accordance with our obligations under European Monetary Union, the level of debt will continue to decline in the years ahead.

[1771] The convergence criteria set out in the European Monetary Union Treaty put a firm obligation on member states to meet challenging budgetary guidelines. We are now consistently satisfying these criteria. However, because of the large overhang of public debt still remaining, we must continue to keep our annual deficits low — even lower than those in other EU member states.

The deficit and debt criteria set out in Maastricht may seem rather academic issues at present. However, these criteria are in accordance with our own domestic needs and reflect the policies we were pursuing in any event. The fact is that, irrespective of European Monetary Union, the overhang of debt must be reduced as rapidly as possible so that we can continue to release more of our national resources for other needs. It is a sobering fact that almost one-twelfth of GNP must be allocated each year to meet deficit servicing costs before the Government can address the many other spending priorities which are of more direct benefit to the community and for which Members of this House continually call.

Of course, the Government has done far more than simply create the right environment for increased employment. In the last two budgets and Finance Bills, substantial measures have been introduced by the Government with the direct, specific aim of promoting enterprise and job creation. As Minister for Finance, I want to ensure that all aspects of Government policy — taxation and expenditure — work towards this aim.

In particular, the Government reduced the tax burden on employment income this year and made a number of changes in the tax code which are of particular benefit to small and medium-sized businesses. Those businesses were given a major boost in the budget, with a wide range of significant measures designed to increase the number of start-ups in this important sector. Among other things, the 1994 budget and Finance Bill, increased VAT thresholds, taking many small firms out of the VAT net altogether; helped small business cash-flow [1772] by putting the VAT system on a cash receipts rather than an invoice basis; reduced capital gains tax on shareholding from 40 per cent to 27 per cent for small businesses; extended the capital gains tax roll-over relief for shareholding in small companies to the wider services sector; introduced a new business relief in capital acquisitions tax which is particular beneficial for the transfer of family businesses; increased the company value limit for the purposes of BES investment by the “original entrepreneur”; improved capital allowances for hotels, farm buildings and business cars; extended the PAYE allowance to the children of proprietary directors and of self-employed persons, where they are working in their parent's business; and, to improve access to funding — an issue of major significance for the small enterprise — the budget introduced a £100 million loan fund for small business. The fund, which is administered by the ICC, advances business expansion loans to firms in manufacturing, tourism and internationally traded services.

These, with all the other policy measures of recent years, are helping to improve the economy's capacity for job-creation.

Since the publication of the 1994 Estimates, there has been some criticism of the Government's policy on spending. The charges are usually summed up in the slogan that somehow this is a “tax and spend” administration. While the Government may point to an Exchequer borrowing requirement held well within the Maastricht Treaty guidelines, the critics — even though very few of them are here——

Mr. Durkan:The Minister was a critic at one time.

Mr. B. Ahern:——would argue that this has been achieved only by maintaining high tax levels and covering the fact that public spending has continued to absorb an increasing share of national income.

Looked at narrowly, the critics seem to have a point. It is certainly the case [1773] that public spending has increased. In 1990, net current spending fell to 24.5 per cent of GNP; this year, it is likely that it will be around 28 per cent. However, these figures do not give a complete picture. If we examine the position in our European partners, we see that there has been a similar rise in public spending throughout the European Union.

However, the rise in spending in Ireland has been much less than that in the rest of Europe. Since 1990, total Irish public spending has increased from 40.2 per cent of GDP to 42.9 per cent in 1993. By contrast, in the same period, for Europe as a whole, total Government spending increased on average from 47.9 per cent of GDP in 1990 to 51.7 per cent in 1993, a much higher rate of increase. It is worth pointing out that these figures show that the level of total spending in Ireland is very substantially below the European average, a point which the critics do not point out because they would not be capable of examining figures for other countries.

The point, of course, is that one has to look behind these figures. Expenditure has risen in all European countries during this period, primarily because of the slow-down in the international economy. The resulting increased social welfare spending, in particular, imposed significant additional burdens on the Exchequer. Secondly, over the last few years the Government has had to honour commitments entered into in respect of deferred general and special pay increases under the Programme for National Recovery and the Programme for Economic and Social Progress.

I would like to have more time to put the rest of the good news about the first half year on the record but, unfortunately, Opposition Whips limited my time so that I would not be able to do that.

Mr. Durkan:The same applies to our time.

Mr. B. Ahern:In considering the 1995 Estimates and possible budget proposals, [1774] the Government will make certain that the very favourable economic and budget trends I outlined today will continue next year and in the medium term for the benefit of the country.

Mr. Durkan:I am not sure where to start.

Mr. B. Ahern:If I were the Deputy, neither would I.

Mr. Durkan:I do not have to go far for inspiration to find out where to start, and I am sure the Minister is well aware of that. The tenor of my speech will be to give credit where it is due and, likewise, hand out the brickbats where necessary. Before coming to the debate proper I wish to refer to a matter which has been a bugbear for me in this House in the past couple of years in particular, namely, the standard of reply to parliamentary questions by some Ministers. The two Ministers opposite are not the worst offenders in that regard, in fairness, both of them attempt to give reasonable and qualified replies to legitimate parliamentary questions without attempting to avoid the issue. I do not wish to select individual Ministers who do the opposite, but the Minister for the Environment is probably the worst offender. I raise this matter today because this is the time we normally review the performance of Ministers. As an example of the arrogance of some people, I will refer to a parliamentary question which I tabled at the end of May to which I received a reply from the Ceann Comhairle stating that the question was a repeat of one tabled in February 1994. The question in February was of a specific nature and the question refused was also of a specific nature. There is no precedent for that type of behaviour, something which has been established recently and smacks of arrogance and indifference. Arrogance in and indifference to the Houses of Parliament may at first appear to be a sign of a person's strength but, ultimately, it will turn out to be a weakness.

I followed up the matter by tabling an amended question. The first question [1775] related to funding from the national lottery and my second asked the Minister if there was any other source of funding available to the Department to meet a specific requirement. He referred to the reply to Question No. 74 of 10 February, 1994 but that question was about a different matter. I had hoped to raise that matter on the Adjournment but could not due to time constraints. In the next Dáil session I hope we do not have that type of smart alec reply to legitimate parliamentary questions. In the past four years, in particular, I thought Ministers would have learned to be courteous and attempted to reply to parliamentary questions asked in the House. Even if they hold members of the Opposition in contempt they should not hold the Houses of the Oireachtas in contempt and, in turn, the general public. I say that by way of warning and it is something about which all Members of the Oireachtas should be aware. The right of a Member to ask a valid parliamentary question and receive a reply should not be impeded in any fashion because that can be construed only as an attempt to interfere with the legitimate democratic process.

I wish to refer to Health, for which I am the Fine Gael spokesperson. I give the Minister credit because he has attempted to address some of the problems in his Department. Health affects everybody in the community. Everyone at some time is affected by the standard of the health services whether community care, hospitals or special hospitals. However, I must bring the House and the Minister back to reality by pointing to the massive problems and the inability of people to deal with them in the manner suggested by the Minister, despite his best efforts.

Waiting lists exist for special surgery, such as for hip replacements and so on. Attempts have been made to deal with that problem but the waiting lists still exist. Those on a waiting list must endure pain and suffering while awaiting surgery. They are anxious also about whether they will gain access to the service [1776] they require in time. We have not achieved much.

I am disappointed about the lack of progress in dealing with the old chestnut, orthodontic treatment. Notwithstanding the Minister's extension of the scheme to cover children in a certain age group, and the allocation of an extra £4 million to reduce the waiting list, the length of time children have been on the waiting list is disgraceful. The method of determining the category into which patients should be placed, which determines the length of time they must spend on the waiting list, is unsatisfactory. Often those placed in the third category do not gain access to the service.

I am aware of the ongoing debate about orthodontics, namely, whether the service is required for cosmetic purposes only. We should know the difference at this stage because we have been told about it often enough. When it is diagnosed that a child needs treatment every effort should be made to ensure he or she receives it as quickly as possible. The child should not have to wait two to four years for treatment. At that stage the child's parents would be forced to seek alternative treatment. It is regrettable in many cases that children whose parents are medical card holders have been forced to opt for private care.

I advised the parents of a child to seek an independent medical opinion which conflicted with the opinion that placed a child in a particular category, namely category 2, and under which the child would have to wait two or three years for treatment. Following repeated representations the patient received treatment. It should not be necessary for people to go to those lengths to achieve the legitimate right to treatment for school children.

Today, I heard of another child who has serious orthodontic problems and who was not deemed to be in need of attention, yet a private orthodontist readily qualified the serious nature of the problem. The problem in regard to orthodontists has not been resolved and will not be in the foreseeable future.

Many of the programmes and initiatives [1777] announced by the Minister have a four year life span. One could assume that the same Minister will be in control in four years time, but one should never assume anything in this House. We may not be able to assume a life span of four months in terms of parliamentary life. I warn against any euphoria that might emanate from the Government's benches that such four year plans will resolve the problems in the health services. I am sorry the Minister is not present, but I warn him that his successor may have to implement his proposals.

The same position applies to optical treatment and speech therapy. The problem in regard to speech therapy was raised by Deputy O'Donnell last night. Thousands of children are in urgent need of speech therapy and can not gain access to therapy lessons because there are not enough therapists available. There are not enough training places, the rate of remuneration is not attractive and many of those who qualify as speech therapists work overseas where they are properly paid for their services. Children who need speech therapy cannot gain the maximum advantage from education facilities. There are plans for great things to happen in this area but it will be some time before they are realised. Like election promises I worry about them. I do not stay awake all night thinking about them because the problem may be resolved before the fourth year of the four year plan. The Minister should address the problems in regard to speech therapy.

I wish to refer to the lack of facilities for young people with behavioural problems. Traditionally, this has been dealt with by three Departments, the Departments of Health, Justice and Education. I hope the Minister opposite will convene some sort of discussion with her colleagues, the Minister for Health and the Minister for Justice, with a view to providing the necessary places to give those children the treatment they require. As we speak I am aware of a situation where one young person with behavioural problems was transported outside the State to Texas for specific treatment not available at home. I know it is fashionable for [1778] people to go outside the State for various reasons and that everybody wants to go to Texas. However, it will cost much more to provide facilities for that child outside the State, in terms of the cost of transport and of the service itself, than to provide facilities at home where they should be provided. It would be more efficient and far better for the country to provide the service at home. I am sorry that at this stage in the development of our society we have not copped on to the lack of services and facilities in that area. Despite promises from well meaning Ministers from time to time, we have not grappled with the situation.

Virtually every Member of this House knows of some young person with serious behavioural problems who needs accommodation and specialised treatment in a semi-institutionalised setting and who has not been able to get it. We are storing up problems for ourselves in the future because saving a penny today means having to spend £10 tomorrow.

I wish to refer to the problem of hepatitis C which was caused by an agreed medical procedure whereby women, and in many cases their families have themselves also become ill. Despite the Minister's repeated protestations about the availability of counselling and treatment and all the necessary backup facilities, they are not available, and the quality of counselling falls far short of what is required. Every day women tell us in detail about how they can get more information and advice from other sources overseas than is made available to them here through a system which was allegedly set up specifically to cater for the problem. The Minister might not agree, but the women are extremely disappointed. It is several months since the scare first started and the problem was identified. If some attention were given to putting the necessary backup services in place there would be no ongoing worry and legitimate criticism. In many cases spouses and children are also affected but the full extent of the problem has not yet been identified and the success or otherwise of the treatment has not been properly quantified. Information which [1779] is available overseas is not being made available to women here, despite protestations to the contrary.

I would not advise the Minister for Health or any other Minister to go away for the summer holidays happy in the knowledge that this issue will disappear. We on this side of the House intend to keep that issue to the fore to ensure that the large number of women who have been infected are not forgotten and that they will receive the kind of care and attention they deserve. I have not spoken, except once before in the House, about the question of compensation but that must inevitably arise and will have to be tackled by the Government.

I am sorry there are only two minutes left because there are other issues I want to speak about, for instance, breast cancer. Last night we spoke about the Centre for Independent Living to which a small grant was allocated, not directly by the Minister. Through him, I hope provision will be made for ongoing funding in the not too distant future.

Now that the recess is upon us and Ministers are winging their merry way to exotic places where the sun will beam down while they sip their Cuba libres in the cool and balmy shade of the Eucalyptus trees, I hope they think of the poor unfortunate citizens who are left at home, and wonder with awe about how they managed to escape the wrath of the people for so long. There was a slight indication of the people's wrath in the recent elections, but that is a minor thing. The rest is still to come or, as the Government might see it, the worst is still to come. As they recline on the tropical beaches they will, no doubt, consider how good the people of Ireland have been to them in the last 18 months or so. The people's patience has not been fully tried yet but it is very close to it. I hope, if they survive until the end of the year they realise that it does not pay to ignore either the Opposition or the legitimate concerns expressed by the people.

Minister for Education (Ms Bhreathnach):I welcome the opportunity to participate [1780] in this Adjournment Debate. I wish to avail of the occasion to highlight some of the achievements in education and give this House an indication of my priorities and concerns for the advancement and improvement in education for all our people.

Education is the means by which societies and individuals enhance their knowledge and human capital. Knowledge and skills are increasingly the basis for economic growth and, it may be argued, represent the only durable basis for a country's economic and competitive advantage. The NESC report, Education and Training Policies for Economic and Social Development, clearly shows the connection between education and employment opportunities in Ireland. The Government and the social partners accept in the Programme for Competitiveness and Work that the key elements in competitiveness that are of greatest importance are no longer confined exclusively to the direct costs of production, and they include in particular the quality of education and training. Much international expert comment and analysis emphasises that the priority given to education and the status within a society accorded to teachers and other education workers may be the most important determinants of economic growth.

Although education is central to economic progress, it does not just have a mere functional role. Education is a major State project, a project through which society socialises its young, enhances its repertoire of knowledge and skills and renews itself through developing its internal critical faculties.

The Programme for a Partnership Government, in addition to recognising the economic importance of education also underlines the central importance of education in promoting equality and equal opportunity for all our citizens. It identified a number of key policy priorities, including tackling disadvantage both in school and outside school, the provision of second chance opportunities for adults and improving access to third level education, and the provision of the necessary supports for this task, including remedial, psychological [1781] and guidance counselling services, and maximising the benefits from the European Structural Funds. It committed the Government to pursuing vigorously the open consultative process with the partners to create a new policy and legislative framework for our education system, a reformed framework to meet and cope with the needs and challenges facing us as we approach the new millennium.

The time during which I have been Minister for Education has been a period of unprecedented consultation on education reform. I have ensured that the process has been open and democratic. The National Education Convention, a watershed in the history of Irish education, held last October in Dublin Castle, proved an enormous success. A broad range of groups was involved and I had the opportunity to listen to their views in an open and public way. Tangible and encouraging results emerged from the convention and there was an obvious convergence of opinion on a wide range of issues.

It is my intention to forge ahead with the preparation of the White Paper on the basis of the comprehensive consultative process which has, and is taking place. The process of reform cannot afford to lose its momentum. The White Paper will map out the Government's vision of the future of education and will be followed by bringing legislation before this House. I look forward to the contributions of Deputies from all sides at that stage.

In the short time available to me, I wish to focus on three key themes which underpin my strategy since taking office: the significantly better overall funding for the education sector, the targeting of resources to the disadvantaged and those with special needs and the emphasis on more relevant classroom processes through curriculum reform and in-career development.

The following are examples of the main funding increases in the primary education sector. Capital or building expenditure at primary level has been increased from £17 million in 1992 to £19 million in 1993 and is £26 million in 1994. This [1782] year's increase of 36 per cent will allow 73 additional major projects to commence in 1994. The capitation grant for all schools has been increased by a further £5 per pupil at primary level in 1994, which means that it increased from £28 in 1992 to £33 in 1993 and is £38 in 1994.

Recent demographic trends resulted in a reduction in the number of teachers required, but I have ensured that all these teaching posts will be retained. In 1993 the pupil-teacher ratio was reduced from 25:1 to 24.2:1. The retention of these posts in 1994 will effectively reduce the pupil-teacher ratio to 23.4:1. Teaching resources have also been increased at second level in 1993 and 1994. In the area of second level capital expenditure in 1994 the allocation represents an 85 per cent increase on the 1992 expenditure for the development of the school building programme. The 1993 and 1994 provision for the third level sector reflects the importance of this sector and the contribution it makes to the cultural, economic and social development of the country.

As well as securing increased overall funding for the education sector, I have concentrated on targeting the disadvantaged and on making extra provision for pupils with special needs. There will be an extra 425 teaching posts available in the primary sector this year and I will allocate them as follows. An additional 100 remedial teachers have been appointed and this has benefited more than 300 schools. Additional teachers will be appointed to schools designated as disadvantaged and these appointments will have the beneficial effect of ensuring that infant classes in disadvantaged areas will be no larger than 29. This is the first phase of the Programme for a Partnership Government commitment to reduce class size to a maximum of 29; 120 additional posts will be allocated to special education, an unprecedented commitment to pupils with special needs.